This downturn has not, however, been reflected by other auditors, with many reporting strong growth.

In a letter seen by Accountancy Age, AV Audit director Ian Hughes explained to employees that a reduction in staff was necessary for the business to stay economically sound.

‘The service sector has been undergoing a period of relative weakness for the last 18 months or so. Service sector growth was 0.3% for the first three months of the year, and that coupled with a general downturn in the economy has led to pressure on our traditional client base,’ read the letter.

‘In addition, one or two large clients have gone into liquidation and this has added to the pressure.’

Numerica has refused to comment on the letter, but pointed to the company’s recently released annual report, which states that the board has reviewed headcount across the business and identified areas where efficiencies can be achieved.

According to last month?s Accountancy Age Top 50, AV Audit’s fees grew by 27% last year, largely through acquisition, as the audit industry posted growth of 8.5%.

In contrast, Steve Edmonds, managing partner of entrepreneurial business services at Grant Thornton, said: ‘We haven?t noticed a downturn, in fact it’s been quite the contrary.’

BDO Stoy Hayward and Ernst & Young also said they were seeing growth in audit work.